Max’s acquires Pancake House, eyes backdoor listing?

The Max’s Group of Companies is now the owner of Pancake House Holdings Inc. (PCKH), a publicly listed company in the Philippine Stock Exchange, after Max’s paid PCKH owners close to P3.9 billion, in a transaction described by market analysts as Max’s prelude to backdoor listing.

Max’s acquires 60.37% of Pancake House for P3.9 billion

On December 20, Pancake House Holdings Inc. (stock code: PCKH) announced that its principal shareholders have agreed to sell to the Max’s Group all of its shares in the company at a price of P15.00 per share.

The transaction, valued at close to P3.9 billion, will give the Max’s Group 60.37% equity in PCKH representing all shares owned by the original Pancake House owners.

Max’s to buy other PCKH shares for P15.00

The P15.00-per-share acquisition price represents a premium of 6.4% over PCKH’s closing price of P14.10 a day before the transaction. On December 20 when the acquisition was announced, Pancake House requested for an hour-long trading halt and when trading resumed, its stock price surged 22% to close at P17.20.

Today, December 23, PCKH’s stock price is down 11.6% trading at P15.20 after the midday market recess.

Part of the conditions of the acquisition is a tender offer by Max’s Group to acquire the remaining shares of PCKH from minority stockholders. Max’s will offer the same acquisition price of P15.00 to those shareholders holdings PCKH shares. The tender offer will commence in January 2014.

Max’s going public via backdoor listing?

Market analysts believe Max’s acquisition of Pancake House may be a prelude for Max’s backdoor listing, an alternative way to go public.

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Backdoor listing occurs “when a listed company acquires or merges or combines with an unlisted company, or when a listed company is acquired by, merged or combined with an unlisted company, and which acquisition, merger or combination results in a substantial change in the business, membership or the board of directors, or voting structure of the listed company.”

Pancake House and Max’s Group company details

The Pancake House Group of Companies started in 1974 and currently has 105 outlets of its flagship brand Pancake House. It also owns 300 outlets of other restaurant brands such as Dencio’s, Kabisera ng Dencio’s, Teriyaki Boy, Sizzlin’ Pepper Steak, Le Coeur De France, The Chicken Rice Shop, Maple and its most recent acquisition, Yellow Cab.

The Max’s Group of Companies, meanwhile, operates 150 Max’s Fried Chicken stores in the Philippines and abroad. The company also owns the country territory franchise for international food brands such as Krispy Kreme and Jamba Juice.